Everyone age 50 or older is a prime candidate for Long-Term Care Insurance. The Earlier you take out a policy, the better. In most cases, you will almost certainly pay less in premiums over the life of the policy than if you ever need even one year in a nursing facility. It is by planning NOW that you can secure your future at a lower cost!

If you recognize that you are not superman or superwoman, and that there is a reasonably good chance that you will need someone to help take care of you before you die, you should be looking at Long-Term Care Insurance. If you plan ahead, own your own home, and have some savings and investments to protect, then you should be a step beyond look, because there is probably a Long-Term Care plan available that you could afford without affecting your present lifestyle. When all is said and done, in order for you to take out and keep a Long-Term Care Insurance policy, you must be more comfortable doing without the money you pay for premiums than you would be if you kept the money and remained self-insured. Long-Term Care Insurance should give you security and peace-of-mind. Most of my clients have concluded that saving a lot more money in their retirement years is not the objective anymore; however, protecting what they do have so they won’t lose it all before they die is a major objective.

Long-Term Care Is The Biggest Reason For Financial Failure Among Seniors Today!
In fact, over 70% of Americans believe they will not be able to cover their Long-Term Care expenses!

Most of us would jeopardize our life savings if we did without Long-Term Care Insurance. However, I have clients who truly could self-insure if they wanted to, and perhaps my experience with them will clarify the logic of taking out this coverage: if people who are so wealthy sees the benefits of coverage, what does that say to those of us who are not as fortunate financially?

I have one client in particular in mind. This client has many investments and is a very wealthy man. He could obviously afford to do without Long-Term Care Insurance, and when I met him, I advised him he did not really need this type of protection. He told me something I will never forget: He said, “It is true that I could do without Long-Term Care Insurance; in fact, I could build my own nursing home! But, do you know what it would cost if my wife and I had to enter a nursing home at the same time 15 years from now?” I replied that I had a pretty good idea based on today’s trends, adding that the cost could be as high as $160,000 per year. He then continued, “I know that it would be somewhat unusual for us both to end up in a nursing home at the same time, but would you also agree that is would a little unusual for a person to stay in a nursing home over 13 years?” I agreed that would be somewhat unusual since the majority of people for not spend over 5 years in such care. He continued his story: “Yes, it is unusual, but my mother-in-law has been in a nursing home for that long, and I am still paying the bill! It doesn’t appear that she is near death, so she may stay several more years. The cost of this care has already exceeded $500,000. Even though I could take my chances, I don’t think it makes sense for my wife and I to take that kind of risk, just to save a few thousand dollars a years in premiums. Can you provide me with a plan that would alleviate this risk?”

The era of Long Term Care is still new enough that people have stories that resonate deeply when told.

This is similar to life insurance in the first half of the 20th century. A typical story at that time may have been the father who died in his 30’s from pneumonia or an industrial accident, and left his six children and wife without any income. As insurance companies developed affordable products, families purchased them in droves. Fear motivated people to ensure that the fate of the family of six children did not befall them.

Today, life insurance is more often than not driven by a logical analysis of the numbers and statistics. It is still bought to protect the same need but the gut wrenching fear is rarely found.

Not so in Long Term Care situations. The parents and grandparents of today’s 40 and 60 year olds did not plan to live to age 90. They did not plan to develop Alzheimer’s or live through a stroke or heart attack. Nor did they know that their savings and Social Security would not provide the ability to care for their spouse or themselves.

Ronald Reagan was president of the most powerful country in the world, then he required constant care and supervision due to Alzheimer’s. Christopher Reeve was a successful actor with a young family, and then a quadriplegic who required 24 hour a day skilled care; still with his young family.

It’s not only famous people, of course. My healthy 72-year-old uncle who danced and flirted at my wedding in 2003 had a stroke in 2004. He is completely dependent upon my aunt for all his needs today.

They sold their house and moved to an assisted living apartment in order to preserve her health and financial stability. While his health had been severely compromised he has 10 grandchildren and he doesn’t want to miss a day of their growing up.

For those of you who think they are too young to buy the insurance, this story is for you. A president of a small company decided to put in a Long Term Care program for his key people including himself. He was only 54 but recognized the need due to his family history and liked the tax-advantaged benefit it provided. He decided in March but didn’t get around to the application until May. In April he suffered an episode of dizziness and was unable to speak for about 30 minutes. The doctors put him on a mild medication and told him they would watch it. Their diagnosis: Transient Ischemic Attack (TIS). Insurance results: Postpone for one year. A TIA is a precursor to a stroke.

Now that you have heard the emotional story, here are the logical reasons. Compare the cost of buying the insurance today versus waiting 10 years. If you deposit your premium amounts for 10 years, you will need to earn between 10 and 11 percent net after taxes to equal the savings generated by buying it younger. If you experience a stroke within the next year you won’t be able to buy it in 10 years. You will have already paid for your Long Term Care out of your own pocket.

Some of you may be thinking, “Well I have plenty of money to take care of myself.” I do acknowledge that this is the case for some people, and some do choose to self insurance. But here is my next question…how do you want to spend your money? Would you rather spend $3,000 per year for 20 years (total cost $60,000) or spend $200,000 per year 20 years from now? You would receive your premium investment back in just four months in a nursing home.

A friend of mine who is a Long Term Care specialist in California told me the story of her clients who were worth over six million dollars but wanted Long Term Care Insurance. When asked why they wanted the insurance, they replied, “When we are incapable of making our own decisions, we don’t want heirs deciding whether or not to spend their inheritance on our care.”

Another story I tell to my wealthier clients has nothing to do with Long Term Care Insurance but everything to do with our spending habits. My condominium had discreet water damage to our wallpaper and floors during a bad storm soon after I moved in. Not for a minute did we consider spending our hard earned money or time on repairs. My wife and I could live with it. Then, the condominium manager left me a message that I had a $7,000 settlement coming to me to replace the floor and wallpaper. All of a sudden I found the time to look for some new wallpaper. I tell prospective insured, if you have the insurance you will have the extra medical test done, you’ll have the floor replaced and you’ll hire that extra home health care that will make your quality of life the best it can be.

It’s quiet now. Finally, a few moments to myself. My sister is gone, and dad is resting – sort of. Please, God, let him breathe without gasping, this one night. I’m so tired. But the day is not over for me. Tonight is my night to help out. Three nights ago it was my night, too. Dad and I spent much of it struggling – him to catch his breath, me to keep my composure.

Tonight he seems a little stronger, but he’s still so weak. Hard to believe he was golfing a few weeks ago. How quickly life changes, and how vulnerable we feel as children. Dad has been our only parent for the past 22 years – the memories, the history of a family, all gain new significance during this trying period. Now my sister and I assume the role of “grown-ups.” Will we soon become the oldest generation in our family?

For a week we take turns around the clock, bathing him, dressing him and trying to find something he will eat – all done with the vision of keeping him home and not moving into a nursing home. We struggle between our commitment to provide for our father and out inability to do so as his condition worsens. After much discussion dad is the one who decides that his best chance for recovery is the nursing home. It is extremely difficult for us to take dad away from his home – but a decision made easier because six years earlier, when dad turned 70, my sister and I purchased Long-Term Care Insurance for him. He knew I was selling it and looked into the insurance out of fear that his bills might literally cost him the farm. He knew things could change quickly at his age. In this case he was right.

As a Long-Term Care Insurance sales professional, I now know why my clients often say they’re buying Long-Term Care Insurance to stay out of a nursing home, Many people envision the nursing home as a crowded, noisy place with little privacy. Unfortunately, they’re not far off. Spend any amount of time in one, and you will soon discover how important a private room is to one’s dignity.

One night when Dad and I were watching the Chicago Cubs on TV, he said, “You know the best thing about this insurance you kids bought for me?” He looked at me and Said, “I don’t share my room with anyone, and no one else uses my bathroom.” He then noted how difficult it was for so many of his friends who did share rooms with those who suffered from dementia, incontinence and other frailties of old age. Another lesson learned from dad: Dignity is as important as 87 as it is at 57, 27, or 7. Long-Term Care Insurance gave my father a room to himself and the dignity he deserved.

The insurance also took the burden off us kids to provide care, giving us the freedom to just love our father…to sit up late watching the Cubs, to laugh, to cement memories and to honor this man we called dad. These things were nearly impossible when we were taking care of him at home. Exhaustion and fear do not leave time for that.

Long-Term Care Insurance is designed to help people live independently as long as possible, even with a chronic illness, physical disability or cognitive disorder. Aging gracefully has never been easier because Long-Term Care Insurance does indeed allow a much higher level of coping, both for the patient and their family. It can include medical treatment, skilled nursing, assisted living and help with basic daily functions such a dressing, bathing, household chores and required therapy. It was a relief that, when dad needed those things, the professionals came in the door and we walked out the door, leaving the care to them.

The burden for asset preservation is ours. The scary prospect that our nest eggs might someday be spent on assistance with our daily functions needs to be dealt with today. Long-Term Care is a blind spot in our culture’s collective consciousness and a weakness in our financial planning that must be addressed now, not later.

Today my sister and I remember dad just the way he wanted to be remembered – and the way we want to remember him. The greatest gift I have given to myself and my own children is my Long-Term Care coverage. I know I will be able to age gracefully and with dignity and choice.

Claudia, 50Sunrise
I don’t have Long Term Care Insurance yet, but I really need to get it. I’ve known people who have had to live in nursing homes and I’ve seen what the costs are. If you don’t have insurance, who’s going to pay the bill? Hopefully you just wake up dead, but if not, someone has to pay the price. I’m not going to sell everything I have to maintain my dignity, and why would I knowingly pass that expense on to my kids? I really believe in the coverage but I just haven’t bought it yet because it takes time to research the different policies. I don’t want to make a mistake and buy the first thing I see. I want to make sure I get the best policy for my money.

Jack, 63Delray Beach
I do have Long Term care Insurance. We decided to purchase the policy when I was 58 years old because my wife is 11 years younger than I am and so chances are I’ll require care before she does. We don’t want to deplete our other estate funds to pay for my care, so we thought the coverage would be a value. My wife doesn’t currently have Long Term Care coverage because she’s only 52, but we might want to consider that eventually. She’ll most likely survive me and we feel that if she were to become ill, we could cover those expenses. I feel that there’s more of a need for me to protect her and to preserve the estate for the 35 or so years she has left.

Rosemary, 59Boca Raton
I do have Long Term Care Insurance. My daughter got the policy for me and she pays for the premiums. To quote an old saying, “It’s better to have it and not need it than to need it and not have it.” When my husband was sick, we had a lady care for him, but that wasn’t covered so we had to pay for it. That can deplete your savings fast because those services are very expensive. I really don’t want to be a burden to my family. If my daughter didn’t pay for the coverage, I would because if I needed daily care, how could I expect my family members to provide it? They have their own lives, and besides, professionals are trained and could probably help me more.

Victor, 80Pembroke Pines
About 15 years ago, I decided to get Long Term Care Insurance for my wife, but to my shock, I found out that she didn’t qualify because she used a walker. I investigated different companies and policies, but the response was always the same. At the time, I didn’t think about covering myself, but I knew I had to save money to take care of both of us because the expenses are rather large. I did it by investing in the stock market and I set that money aside. As I got older, I considered getting the coverage for myself because I firmly believe in it. Since then, we have had home health care for my wife and she’s also been in an assisted living facility where she gets 24-hour care and that costs $7,000 a month. If something happens to me, I’ll probably use that facility too…if there is any money left.

A Care Event in Your Family Can be a Challenge, But You Can Lessen Its Impact

The impact of Long Term Care events on Families is well documented. We have learned through our assessment that there are other financial and emotional costs that may not be as readily apparent. Specifically, there are cost to the long term care recipient, caregivers and extended family.

All of the people we discussed previously in the Circle of Care may experience an impact on:

• Stress levels from demands on time and serving the needs of others
• Job and careers
• Relationships with spouses, siblings, children, step-families and in-laws
• Their incomes and finances

Perception and Reality

With medical advances and healthier lifestyles, people are living longer these days – often 20 or even 30 years into retirement. As we’re doing a better job at living longer, the likelihood of needing care, companionship or help later in life is greater than ever.

Consider the Statistics Around the Potential Need for Long Term Care

Nearly two-thirds of Americans over age 65 will need long term care at home, through adult day health care, or in an assisted living facility or nursing home.*
* AARP Public Policy Institute “Long Term Care Trends”

The Double Whammy

For younger couples with two sets of parents, the chances of being affected by a long term care event are high if any of their parents lack the financial resources for their own care. And if care for one parents significantly impacted a couples’ finances, would they be able to contribute to the care needed for the other parents?

Survey Reveals Top Concerns

A January 2010 Age Wave/Harris Interactive survey sponsored by the Genworth Financial companies revealed that “medical expenses not covered by insurance” is the top concern of people age 55 and older.

More then half of all respondents (55%) reported that their greatest fear regarding a long term care illness or event was being a burden on their family. In fact, they reported being five times more concerned about being a burden than dying.

Although the issue us a top concern, many are still not engaging in open conversations about potential long term care expenses, the costs or the types of care they would prefer or may need in the future. More than 90% surveyed have not talked about critical long term care issues with their spouse/partner, aging parents or adult children.

The First Step in Planning is to Talk to Your Family

Figuring out how to address a long term care need is stressful, but having a direction before there’s a need can help immensely. Having no plan can be overwhelming. When people have to make emotional and financial decisions unexpectedly, judgment and decisions can be less than optimal. And not having the conversation means you don’t have direction from the person needing care. People can find themselves writing on-the –spot checks for care. Spending money for care on a moment’s notice is something no one wants to do, and the quality of those decisions may be compromised.

The broad impact – to finances, emotions, jobs and careers, immediate and extended families – adds urgency to the need for these important conversations – before the need for care arises.

When someone experiences a debilitating health event – short-term or long-term – that may require them to be dependant on others, to dip into savings or stop working, the effects can be significant. There are obvious consequences and new circumstances; other impacts are unseen, but real nonetheless.

About Care Recipients:

34% – Are mothers receiving care from their children

12% – Are fathers receiving care from their children

9% – Are spouses receiving care from their spouses

Financial Impact:

88% – Said their household income was reduces by an average of 44% due to their long term care event

60% – Reported a need to cut back on family expenses after a long term care event

63% – Reduced their saving by an average of 61%

Emotional Impact:

42% – Felt stress with their spouse

35% – Reported stress with their children

Care Needed Due To:

45% – A Specific Illness

42% – Age-Related Frailty

41% – Cognitive Impairment

13% – Rehabilitation From an Accident

Care Arrangements:

65% – Of care recipients had not considered the possibility of needed long term care

45% – Of care recipients required care for 3 years or more

40% – Of care recipients were moved into a family member’s home for a period of time

The dollars to pay for care must come from somewhere. Most often, savings and retirement contributions are hardest hit, threatening families’ ability to live comfortably in the future.

Being the main caregiver has significant effects on the emotional and financial well-being of an individual and their family. Juggling time, career, family and finances are the most prevalent stress points but they are only part of the personal and emotional issues that make providing long term care “expensive” on many levels for the Primary Caregivers family.

When someone has a short term or long term care event, there are often people within a “Circle of Care” who get involved to help. At the center of the circle is the Care Recipient; the person who is in need of assistance.

Surrounding that person is an evolving circle of care that includes a Primary Caregiver, who most often provides the majority of hands-on care. In addition, they often contribute significant financial support. Primary Caregivers and their families are the most directly impacted by their involvement in care.

The Secondary Caregiver is involved to a lesser degree. Whatever the level of involvement, this person fully understands all the dynamics of the care the recipient receives. Even thought they are not at the forefront of care, that financial and emotional impacts of a long term care event can be the same as to the Primary caregiver and should not be underestimated or overlooked. Also affected are the Primary and Secondary Caregivers families; siblings, spouses, children and in-laws.

The Community also provides care through religious organizations, community non-profit organizations, friends and neighbors.

Now, let’s take a look at the impacts (financial and emotional) on the caregivers and families in the circle of care from the Care Recipients perspective:

“My wife had to be available 24/7. She also became my chauffeur and needed to help me shower and dress. She needed to help every time I had to move. It affect her freedom, her lifestyle and her health.”

“My husband had to take time off from his job to help me. He needed to take off more time than what was expected. He was frustrated that I had so much pain and felt that he was not doing enough. I hated myself for asking for so much help.”

“I think my son and daughter were worried that I would have to move in with one of them to care for me. I have always valued my independence, and that feeling does not change with age. But I inevitably needed help; it drained them emotionally and financially. Thank goodness form them, but it altered the rest of their lives.”

If you honestly still feel Long Term Care Insurance is not important, wait until next month.

Each of us has defining relationships in our lives; with our parents, our spouses, our children, and our colleagues.

We even have relations of sorts with our accomplishments, our achievements, and our success. And we have relationships with our own futures. We think of them as relationships because they mean something to us – and we are committed to them.

The Ripple Effect
We may understand that there is a financial impact to helping provide care, but there is more to the equation, and it goes far beyond dollars.

There is a ripple that can touch a primary caregiver, a secondary caregiver, their families and their futures. While a loving and selfless act, accepting or taking responsibility for another individual’s impact on our own lives, and on our families’ lives.

No matter how willing we are, no matter how heartfelt our promises are, our caregiving commitments can affect marriages, family dynamics, work commitments, financial stability and other building blocks of our own futures.

Will You Have A Role In Someone’s Care?
Thinking through the impact of your responsibilities as a caregiver is a first and important step.

Whether you are a primary of hands-on caregiver, or someone who orchestrates the care provided by others – whether you provide some financial support or weigh in on important decisions – it’s important to recognize the potential impact of caregiving on all aspects of your life.

Planning ahead for ways to mitigate costs or share caregiving responsibilities is worthy or every family’s consideration

A Guide to Long Term Care Insurance –
Why All Advisors Need to Understand Long Term Care Policy Provisions

Understanding Long Term care Insurance terminology is often the cause of great confusion and frustration for advisors as well as consumers.

Much of the benefits terminology was derived form the Long Term Disability Industry. Today many Long Term Care policies use simpler and more understandable concepts, but assessing the terms carefully is still important, because terms differ between contracts.

Let’s look at just a few for example:

Elimination (Deductible) Period
The elimination period is basically a deductible. It is a period of time that the policyholder is responsible for all their Long Term Care expenses before the benefits of the policy starts to pay. Typically the Elimination period options are 30, 60, 90, or 180 days. Agents (Advisors) must be able to communicate to consumers how a company defines the Elimination Period which can significantly impact the benefits that are payable at the claim time.

There are typically 2 types of Elimination Periods:

Service Day or Calendar Day
With a Service Day Elimination Period, each day the insured receives a covered service and incurs expenses where a bill is issued, counts as 1 day towards satisfying the Elimination Period. But if home care is needed only 2 or 3 times a week, satisfying a 90 Service Day Elimination Period can take the policyholder large layouts of personal money.

But a Calendar Day Elimination Period does not require that charges be incurred or that services be rendered to satisfy the Elimination Period. As long as the Long Term Care Policy benefit is triggered, and the policyholder needs assistance with at least 2 ADL’s (Activities of Daily Living) each calendar day counts towards satisfying the Elimination Period.

Also, some Long Term Care policies have an Elimination Period called a “1=7” provisions. This means, receiving 1 day of care each week will count as 7 days of care.

It is also important to know that some Long Term Care companies offer a “0” day Elimination Period for an extra premium. This means your policy will pay from day 1 of care!

Now, here is another example of important terms in contracts:

Benefit Period
Also known as the “Maximum Benefit Period,” this represents the number of years that Long Term Care coverage is provided. This period usually range from 2 years to Unlimited Lifetime. The number of years selected is used to define the “total pool of money.” This is the amount available for covered Long Term Care services. Benefit Periods are defined in terms of a Daily Amount ranging from $100 to $500 a day, or a Monthly Benefit from $3,000 to $15,000 a month. It is essential for consumers to have a clear understanding between the two options which will impact their claims.

An example is $200 a day in benefits equals $6,000 a month.

However, if your Long Term Care policy has a Daily Benefit and you incur charges over the $200 a day allotted, this will now become an out-of-pocket expense for you. With a Daily Benefit, you cannot borrow from the $6,000 you have to use. With a monthly Benefit, you can use any amount you want on a daily basis as long as you do not use more than the monthly amount.

Still with me or are you a little confused?

In conclusions, consumers should first be educated about basic policy provisions, how they differ, and how they may impact future claims before choosing a Long Term Care policy. Consumers must choose a knowledgeable Long Term Care specialist capable of providing a clear expiation of these increasing complex and varied policy provisions. This is an essential step when purchasing Long Term Care today.

A Guide to Long Term Care Insurance –Why All Advisors Need to Understand Long Term Care Policy Provisions

Understanding Long Term care Insurance terminology is often the cause of great confusion and frustration for advisors as well as consumers.

Much of the benefits terminology was derived form the Long Term Disability Industry. Today many Long Term Care policies use simpler and more understandable concepts, but assessing the terms carefully is still important, because terms differ between contracts.

Let’s look at just a few for example:

Elimination (Deductible) Period
The elimination period is basically a deductible. It is a period of time that the policyholder is responsible for all their Long Term Care expenses before the benefits of the policy starts to pay. Typically the Elimination period options are 30, 60, 90, or 180 days. Agents (Advisors) must be able to communicate to consumers how a company defines the Elimination Period which can significantly impact the benefits that are payable at the claim time.

There are typically 2 types of Elimination Periods:

Service Day or Calendar Day
With a Service Day Elimination Period, each day the insured receives a covered service and incurs expenses where a bill is issued, counts as 1 day towards satisfying the Elimination Period. But if home care is needed only 2 or 3 times a week, satisfying a 90 Service Day Elimination Period can take the policyholder large layouts of personal money.

But a Calendar Day Elimination Period does not require that charges be incurred or that services be rendered to satisfy the Elimination Period. As long as the Long Term Care Policy benefit is triggered, and the policyholder needs assistance with at least 2 ADL’s (Activities of Daily Living) each calendar day counts towards satisfying the Elimination Period.

Also, some Long Term Care policies have an Elimination Period called a “1=7” provisions. This means, receiving 1 day of care each week will count as 7 days of care.

It is also important to know that some Long Term Care companies offer a “0” day Elimination Period for an extra premium. This means your policy will pay from day 1 of care!

Now, here is another example of important terms in contracts:

Benefit Period
Also known as the “Maximum Benefit Period,” this represents the number of years that Long Term Care coverage is provided. This period usually range from 2 years to Unlimited Lifetime. The number of years selected is used to define the “total pool of money.” This is the amount available for covered Long Term Care services. Benefit Periods are defined in terms of a Daily Amount ranging from $100 to $500 a day, or a Monthly Benefit from $3,000 to $15,000 a month. It is essential for consumers to have a clear understanding between the two options which will impact their claims.

An example is $200 a day in benefits equals $6,000 a month.

However, if your Long Term Care policy has a Daily Benefit and you incur charges over the $200 a day allotted, this will now become an out-of-pocket expense for you. With a Daily Benefit, you cannot borrow from the $6,000 you have to use. With a monthly Benefit, you can use any amount you want on a daily basis as long as you do not use more than the monthly amount.

Still with me or are you a little confused?

In conclusions, consumers should first be educated about basic policy provisions, how they differ, and how they may impact future claims before choosing a Long Term Care policy. Consumers must choose a knowledgeable Long Term Care specialist capable of providing a clear expiation of these increasing complex and varied policy provisions. This is an essential step when purchasing Long Term Care today.

The Circle of Care Care is often provided by and impacts a wide contingency of people who are important to us. • Care Recipient • Primary Caregiver • Secondary Caregiver • Community Support When someone has a short term or long term care event, there are often people within a “Circle of Care” who get […]

You own a LTCI policy and have been paying the premiums for years. Sometimes when it is time to pay the premium, you have thought, “Why am I spending this money?” In these tight economic times it becomes easy to think I will just let this policy lapse. Why not drop the policy? It’s only […]

Would you buy Long Term Care insurance? “People say the premiums are expensive.” As a Long Term Care insurance Agent, I hear this all the time. Are they?? I have to expand the question for those who make that statement. Long Term Care insurance premiums are expensive compared to…what? Compared to the cost of Long […]

What is Long Term Care? Many people think “Long Term Care” means a nursing home. In fact, Long Term Care includes a wide continuum of care situations. Some people receive Long Term Care in an Assisted Living Facility, others attend an Adult Day Care Facility, and for many, Long Term Care can also be received […]